(MENAFN- Khaleej Times) Next year is going to be a tough and unpredictable year for policy makers due to numerous challenges, it was echoed during a panel discussion at the second annual UAE Economic Outlook 2015 forum in Dubai.
Drop in oil prices will not have its negative impact on the UAE on short-term but long-term impact is not out of question, economic experts said, adding that currency exchange rate is another big challenge or may be bigger than oil price decline as Dubai is a trading hub. Rising inflation in the country is another area of concern, they added.
Founder and managing director of Emerging Markets Leadership Center Dr Tommy Weir moderated the panel that discussed 'the implications of global and regional economic trends and prospects for the UAE economy in 2015 and beyond.'
Opening the panel discussion Dr Weir asked a question to the audience - 'What kind of effects do you think the drop in oil prices will have on UAE's economy?'
There were different opinions, as 58 per cent believed that it will have negative impact, 17 per cent were positive and 25 per cent responded remained neutral.
When the moderator sought panellists opinion, Mohammed Saleh Shalwah, the adviser to the minister of economy said: "No body can say the decline of oil prices will have positive effect on the country. But in the short run, it will not have effect but it will be negative in long run."
Joining the discussion Dr Abdulrazak Al Fares, chief economic, Dubai Economic Council, said: "I think the UAE and Dubai will face three main challenges in 2015." Elaborating on that Al Fares said that first challenge is that decline in oil price will impact budget and public finance.
"My second point is impact of appreciation of exchange rate in dollar. It will have more impact than oil price. Dubai is hub of trade and centre of tourism. If the dollar exchange continues, we have to prepare ourselves to receive tourists," he explained.
Third issue, he said, is the inflation. More than four per cent inflation is bad news, he said adding: "I can't say how can we achieve 4.5 growth if the inflation goes 4.2 per cent next year."
Partibha Thaker, regional director for Middle East and Africa, The Economist Intelligence Unit, said the World Expo 2020 projects will not slowdown despite weak oil prices. Lower oil price for oil means GCC economies are most diversified, she added.
"Dubai is the business hub for Middle East. India is major non-oil trade partner of the UAE. If India continues on reform the UAE will be strong beneficiary. Africa also matters to the country," she explained.
Gary Dugan, chief investment officer and head of investment strategy for global wealth division at National Bank of Abu Dhabi, said: "It's is going to be very difficult for planning for 2015 due to oil price decline. I believe this region and the UAE has a tremendous opportunities and we are doing extremely well."
Shehab Gargash, founder and CEO of Daman Investments said: "I think we are in the state of panics and panic of the day is oil prices. Going forward you have no reason but to expect a defensive thinking."
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